Tesla founder Elon Musk challenged the SEC late Monday. File Photo by Joe Marino/Bill Cantrell-UPI | License Photo
March 12 (UPI) -- Tesla founder Elon Musk accused the Securities and Exchange Commission late Monday of overreach and violating his First Amendment rights in the agency's attempt to hold him in contempt for a previous settlement agreement.
The electric carmaker CEO said through attorneys his Feb. 19 Twitter post outside of trading hours did not go against the settlement he's been bound by since September.
Musk ran afoul of the SEC with a tweet last August in which he said he'd take Tesla private if the share price reached $420, claiming he had already secured funding, which was not true.
The SEC fined him $20 million, forced him to step down as Tesla's chairman and required company officials to pre-approve Musk's communications, including tweets.
In Musk's Feb. 19 tweet, he said, "Tesla made 0 cars in 2011, but will make around 500k in 2019." The SEC argued that statement wasn't accurate and wasn't vetted, in violation of the settlement.
In his response, Musk said the tweet, a part of several he wrote that day, celebrated Tesla's success over the past eight years with information that was already public knowledge.
"The 7:15 tweet reflected information that had already been publicly disclosed in Tesla's Form 8-K, published on Jan. 2, 2019; Tesla's Fourth Quarter and Full Year 2018 Update, published on Jan. 30, 2019; the associated earnings call, also on January 30, 2019," Musk's court response said.
Musk added that he believes the SEC's contempt effort is payback for comments he made on CBS's 60 Minutes where he criticized the agency.
"[The SEC is] building their case," Britt Latham, an attorney at Bass, Berry & Sims who litigates securities cases, told told CNBC. "If they get a violation here, they could get the court to issue an order that puts some more teeth into the consequences of the next violation. Then at some point, given how unpredictable Mr. Musk is, the agency may assume he will hang himself and give them the opportunity to really take some more serious action."